Double bottom in the bitcoin?
By now, more and more brokers are offering trading with cryptocurrencies. This alone is reason enough to take a closer look at the chart of the most commonly used currency: the bitcoin.
As a “Forex” pair, the whole thing is called “BTCUSD”.
Obviously, the first thing that stands out is the strong upward trend in the daily chart. The all-time high so far was formed in mid-July of this year. Since then, the currency has been running in a very clean triangle.
Yesterday, a brief breakout out of this triangle occurred, but the downward movement was stopped pretty rapidly. And again today, the bitcoin was unable to close beneath the triangle, but was instead bought up to a higher point.
These wicks (also called candlestick shadows) are often a bullish sign if they appear gathered at a specific price level. And this is true here, too. In my opinion, the failed breakout will now most likely lead to further increasing prices, and in the next move, the currency would then begin an attempt to break out of the triangle in an upwards direction.
In the hourly chart, I have marked the next resistance level in red. If the 2400 area is overcome, the next large hurdle is not until 2500, followed by the next resistance areas in steps of approx. 100 after that.
What is also very clear to see in the hourly chart is that the two wicks of the daily chart mark an exemplary double bottom (blue circles in the chart). The surpassing of the 2400 would complete this trend reversal formation and would offer a price potential up to at least 2550.
I generally remain bullish for cryptocurrencies, and for the bitcoin in particular. Last week, the CFTC granted the first SEF (Swap Execution Facility) for bitcoins. With this, the trading of bitcoin options is now also possible in a regulated market environment.
I believe we are just at the beginning of a larger development, which, in the course of the cash ban that is surely soon to come, is bound to become ever more interesting.
As always, I wish you successful trades!
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